Real Estate & Construction

Language in Performance Bond Critical in Determining Surety’s Rights to Complete If an owner terminates a contractor due to a contractor default on a bonded project, can the surety hire the same contractor to complete the work under the bond?  Depending on the language of the bond, it may be permissible in Florida. Recently, in Seawatch at Marathon Condominium Association, Inc. v. The Guarantee Company of North America, No. 3D18-1337, 2019 WL 4850194 (Fla. 3d DCA Oct. 2, 2019), a Florida appellate court ruled that the unambiguous terms of an AIA A312 Performance Bond permitted a surety to propose a…
Don’t miss us at the Chicagoland Property Management, Condo & HOA Expo on September 26, 2019. Tressler will be speaking and exhibiting! We will be presenting The Litigious Nature of Today’s Unit Owner. This is a presentation that you don’t want to miss as we’ve noticed it has been a hot topic in today’s legal news and is an all too common issue. Make sure to use VIP code Tressler2019 to receive complimentary meals, parking and seminars. Please visit this link for more information: http://www.chicagolandpmexpo.com/. [See our recent blog post on where we successfully obtained full insurance compensation for a client…
Effective August 20, 2019, Illinois law provides that a maximum of 10 percent retainage may be withheld from payments under private construction contracts and, after the contract is one-half complete, retainage must be reduced to 5 percent and kept at 5 percent for the remainder of the contract.  With this new law, Illinois joins the vast majority of states that have enacted laws pertaining to retainage on construction contracts.  Like almost every other state, Illinois’ retainage restrictions are unique to Illinois and, therefore, parties to Illinois construction contracts should understand how the new law will impact their projects.  This article…
  Just when retailers thought the challenge of the Great Recession was finally behind them, another challenge – lurking for years – is rising fast: Amazon. Hundreds of articles have been published with advice on how “brick and mortar” retailers can differentiate their physical stores from Amazon’s encroaching online business.  Among other things, these articles push personal-level customer experiences, such as workshops, wine tastings, and unique social events that cannot be provided through Amazon’s website. All of these ideas are wise and good, but retailers should remember that when it is time to get a loan or refinance, the lender…
    The default section in a lease lists the set of conditions upon which a landlord may terminate a lease or tenant’s right to possession, as well as landlord’s remedy.  The default remedies are significant and can severely impact a tenant.  This section should be reviewed to minimize the risk that landlord will be able to ever put tenant in default and seek a remedy. Default Triggers are Stiff The default provision typically will say that a default occurs in the event tenant fails to pay rent when due or with a few days of when due.  Having a…
The U.S. Attorney’s Office for the Middle District Florida settled its allegations against a Central Florida contractor accused of violating the Small Business Administration’s regulations by allegedly creating a sham joint venture to be awarded a project. Click here for more information about the settlement. NASA sought bids for a demolition project that was funded by the Small Business Administration (“SBA”).  A requirement of the project was that it be awarded to a business that was qualified as a small business enterprise (“SBE”).  In order to qualify, Sunrise Systems of Brevard, Inc. (“Sunrise”) formed a joint venture with V&R Enterprises…
Developer is Not Indemnified for its Own Conduct Without an Express Agreement in the Indemnification Clause In a case where the jury found both the Architect and the Developer separately responsible for Plaintiff’s damages, an Appellate Division of the New Jersey Superior Court recently held that the Developer is not entitled to be indemnified by the Architect.  See Grandview at Riverwalk Port Imperial Condo. Ass’n, Inc. v. K. Hovnanian at Port Imperial Urban Renewal II, LLC, No. A-2308-17T2, 2019 WL 3798427 (N.J. Super. Ct. App. Div. Aug. 13, 2019)(unpublished decision). The appellate court agreed with the Developer’s argument that the…
Attorney Katerina Tsoukalas-Heitkemper received a successful result for her condominium association client after an extensive four-month forensic investigation led by Kathy (with the assistance of her HOA law team and client) revealed that the Association’s former employee, a licensed on-site community association manager, had committed multiple acts of theft and employee dishonesty over a four year time-frame resulting in a financial loss to the Association in excess of $150,000.  A newly elected Board President asking lots of important questions at the beginning of her term churned up information that did not seem to “add up”.  This initial inquiry and the…
It is a widely held concept that the US is a “litigious society.” Therefore, it is unsurprising that litigation by Unit Owners against condominium and homeowners associations are not uncommon. These suits can range from allegations of breach of fiduciary claims to property damage claims or personal injury claims to allegations of negligence. Regardless of whether or not Unit Owner claims are meritless, association boards find themselves having to expend resources defending against these claims. Even in situations where associations are not sued, they may also find themselves having to expend resources in order to comply with recent case law…
Typically, the governing documents of an association consist of various documents including a declaration, by-laws and rules and regulations. Associations are also bound by statute—condominium associations are bound by the Illinois Condominium Property Act (“Condo Act”) and common interest communities are bound by the Common Interest Community Association Act (“CICAA”). Due to the variety of documents an association is bound by, confusion often arises when there are conflicting provisions and/or requirements in the governing documents or applicable statute. It is important to remember the following hierarchy when it comes to your association: Condo Act/CICAA Declaration By-Laws Rules and Regulations When…
Utah Appellate Court: Homeowners’ Claim for Defective Construction Against Geotechnical Engineer Dismissed Due to Lack of Contract and the Economic Loss Rule A recent Utah Appellate Court upheld the dismissal of a homeowners’ claims against a geotechnical engineer because the homeowners did not have a contract with the geotechnical engineer and therefore their claims were barred by the economic loss rule. See Hayes v. Intermountain Geoenvironmental Services, Inc., 2019 UT App 112, 2019 WL 2621931.  In Utah, the economic loss rule only allows lawsuits for defective design or construction to be based on a breach of contract.  Such a claim…
Each year, hurricane season presents a challenge to contractors and developers along the Gulf and Atlantic coasts as they face the risk of impacts from significant weather.  Hurricanes Michael, Irma, Harvey and Florence are only the most recent reminders of how devastating one of these storms can be.  With the construction industry being as active as it is, projects in storm-prone areas should be prepared to deal with and minimize the physical and financial risks that come along with these storms.  I was recently able to share my insight about what project teams can do to deal with a storm…
Owners of a Massachusetts waste collection, recycling and removal company recently were held personally liable for their failure to pay their employees at prevailing wages.  See Donis v. American Waste Services, LLC, 95 Mass.App.Ct. 317 (2019).  Under Massachusetts law, wage violations are subject to triple damages and payment of attorney’s fees.     The waste services company entered into contracts with several Massachusetts towns that required compliance with prevailing wage laws at hourly rates of $20 — $24.  However, the company paid workers $16 — $17 an hour, or at flat day rates.  The company tried several unsuccessful defenses: (1) the…
Getting members to participate in board member elections can be like pulling teeth. The more convenient you make the process, the more likely to get members to participate. Fortunately, the Illinois Condominium Property Act (the “Condo Act”) and the Illinois Common Interest Community Association Act (“CICAA”) allow Boards to adopt rules and regulations to permit electronic voting. Not only is electronic voting convenient, but it can save the association money by not having to pay for printing or postage.  Boards can always adopt dual systems of voting allow for those members who are not tech savvy to continue to vote in person via…
New Sustainability Ordinances for Construction Enacted in Florida and Colorado Cities  The City of St. Petersburg, Florida is one of the latest municipalities to incorporate the concepts of sustainable construction, sometimes referred to as “green building”, into the requirements of their municipal code.  On April 26, 2019, the City adopted Ordinance No. 359-H; which requires City-owned buildings over 5,000 square feet, which are either existing and being substantially modified or are being newly constructed, to achieve a rating of LEED Gold from the U.S. Green Building Council.   The new ordinance makes clear that the purpose of adopting the sustainability…
In a case of first impression, Maryland’s intermediate appellate court recently held that a subrogation waiver in an owner’s prime contractor contract does not bar a subcontractor claim for contribution against the prime contractor.  See Gables Constr., Inc. v. Red Coats, Inc., No. 907, SEPT.TERM, 2017, 2019 WL 2067348 (Md. Ct. Spec. App. May 10, 2019).  Upper Rock, Inc. (Owner) filed a $22 million claim against Red Coats, Inc., a “security and fire watch company” (Subcontractor), for fire damage to a building under construction.  Red Coats filed a third-party claim against the prime contractor, Gables Construction, Inc. (Contractor), for contribution…